Concessions for prospective tenants in rental housing are at their highest level in more than two years, according to data from Zillow Group (NASDAQ:Z, ZG).
In an analysis of Zillow-advertised rental listings in October, roughly 30% included some sort of concessions. This is down from the concessions peak of 36.7% of advertised rentals in February 2021, but also higher than the low point of 19.4% in July 2022.
Still, Zillow pointed out the fact that typical rent prices are nearly 30% higher than pre-pandemic levels and demand for rental housing is growing. Zillow data found 43 of the nation’s largest 50 metropolitan areas recording a rise in rental concessions compared to last year, with the highest level of concessions linked to rental properties in Salt Lake City and San Jose.
“The pandemic era’s increase in concessions was a direct response to decreased renter demand. Currently, we’re witnessing a different scenario where the demand for rental housing is high, but there’s been a notable rise in supply,” said Anushna Prakash, an economic research data scientist at Zillow. “To differentiate themselves from newer, potentially more amenity-rich apartment buildings, property managers are stepping up their game, offering more incentives to attract potential renters with a broader range of choices.”